State looks at veterans benefit spending

SACRAMENTO  A state oversight panel on veterans affairs on Tuesday began exploring chipping away at the growing backlog of claims and spiraling costs of housing military veterans in California.

The first in a series of planned hearings follows reports that the state could be missing out on $400 million or more in federal benefits each year. Veterans advocates and some members of the Committee on Veterans Affairs have suggested capturing the elusive federal funding by further trimming costs at veterans homes.

They say a comparatively small investment to help returning veterans with their claims would pay big dividends.

The nascent push is a key point in a growing debate over whether the state dedicates too much of its resources on housing for older, sick and disabled veterans rather than focus more on aiding younger returning service members with their claims for federal benefits to prevent rejections and increased delays.

The California Department of Veterans Affairs is spending $167 million, or 68 percent of its general fund budget, to house fewer than 1,700 veterans annually. Department officials say that number fails to account for some 500 deaths and discharges each year, which brings it closer to 2,200 veterans served. Still, the homes are currently operating at half capacity.

“I think it’s striking when you talk about 70 percent of the resources are going to less than 2,000 vets when we have almost 2 million in the state,” Assemblywoman Susan Talamantes Eggman, D-Stockton, told department directors on Tuesday. She and other lawmakers questioned what the state was doing to cut overhead and expand the number of treatments.

They also broadly probed how the costs compared with those of the private sector, something state officials said would be impossible to compute because of complex needs and requirements of veterans.

“In the last five years we have taken on the extraordinary challenge of opening five homes,” said Pouneh Simpson, chief financial officer for the department’s veterans homes division. “And we’re rising to the occasion without compromising the care in our holder homes.”

Simpson said the agency was installing an electronic health-records system across all eight of its homes (two have not yet opened) and filling beds. The department is standardizing clinical staffing and policies, adding an automated pharmacy system and reducing dependence on the generalfund by 7 percent a year at its three older homes. It also is increasing public-private partnerships to expand the reach of services, Simpson said.

Veterans affairs provides housing and then bills insurers for a share of the costs. In Chula Vista, it recovered about 62 percent of the costs in 2011-12, bringing state spending per resident to $26,000. A 70-percent recovery rate would decrease the cost to roughly $20,000 per resident. One way to do that is to boost federal per diems by encouraging veterans to seek the full share for their disabilities.

Simpson said the state is also working to improve funding by using a “triple-check” process and doing wellness checks on which it can collect revenue.

“As we implement these programs, and as we enroll them in programs that offset the cost of care, we are in essence reducing the impact to the general fund,” she said.